Contrary to popular belief, not all the best trading ideas are blatantly obvious and heralded by the media before the turn into something great. Take PositiveID Corporation (OTC:PSID) for instance. This small cap biotech(esque) name is off most trading radars despite posting same big news of late, and shares of PSID themselves have been inconspicuously moving sideways since July, being squeezed ever-so-gently into a well-defined wedge shape. With today's modest move, though, PositiveID Corporation may have sent notice to the trading world that now's the time to start filing in.
If the ticker PSID rings a bell, it may be because yours truly here mentioned it a week and a half ago, suggesting you keep your eyes peeled for the very thing that's happening now... a move above not only the upper boundary of that wedge, but a move that also carried PositiveID shares up and into a key long-term indicator line - the 200-day moving average line.
While it can sometimes be dangerous to apply conventional technical analysts ideas to a micro-cap, sub-$1.00 stock, in the case of PositiveID Corporation, it acts and trades like its higher-priced and larger counterparts. In other words, based on the history of PSID, we can reasonably apply technical analysis here.
The nearby chart tells the tale, though the larger chart at the bottom of this page offers more perspective. PSID pushed above a falling resistance line (red) this morning, and is attacking the 200-day moving average line (green) right now. There's also lots of volume behind the bullish move, suggesting this is a majority opinion.
And, today's strength may not be the last of the bullish effort. PositiveID Corporation shares have bee trapped in a narrowing trading range since September of last year. This four-month consolidation phase has likely meant a lot of trading energy has been pent up. Now it's being unleashed, in a bullish direction. Much like a moving train that has made its way up to cruising speed, it's going to be tough to halt this advance now that it's underway, and the tank is full.
Some traders may want to wait and see if PSID can actually make that first close above the 200-day moving average line before wading in, but that may be an unnecessary caution, leaving some good money on the table.
For more on the company's underlying technologies and prospects, visit the SCN research page here. In fact, if you go back to the early-2012 commentaries, you'll find a great deal of exclusive research and data on PositiveID Corporation.